The spectre of Jordan’s becoming an alternative homeland for Palestinians from the Israeli-occupied West Bank returned to trouble the kingdom’s political scene throughout 2009. In early January, amid Israel’s 22-day war on Hamas militants in the Gaza Strip, King ʿAbdullah II voiced concern over the future of the Palestinians and spoke of a “conspiracy” against the Palestinian people. His statements were interpreted as a warning against an earlier Israeli scenario that entailed passing administrative control of the Gaza Strip to Egypt and forcibly transferring Palestinians in the West Bank to Jordan, thus achieving a purely Jewish state. Concern over this prospect was triggered anew by the victory of the right-wing Likud party leader Benjamin Netanyahu in Israel’s February elections. An estimated 60% of Jordan’s population was of Palestinian origin, and a transfer of the West Bank’s 2.3 million Palestinians—equal to almost two-fifths of the Jordanian population—to Jordan by force posed a daunting prospect.

During a visit to Jordan in May 2009, Pope Benedict XVI prays on the bank of the Jordan River, …

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In May members of the Knesset (Israeli parliament) presented a draft law proposing Jordan as the alternative homeland for Palestinians. This sparked protest demonstrations in Amman, while the Jordanian government summoned the Israeli ambassador to convey its rejection of the proposal. Tension continued as rumours circulated that the Jordanian government had approved a secret U.S. plan to rescind the rights of Palestinian refugees to return to their homeland. This coincided with the Jordanian government’s adoption of a decentralization plan to divide the kingdom into three administrative regions, a plan that was associated—in the rumours—with a political scheme to create an alternative Palestinian state in Jordan. At a speech in August, King ʿAbdullah denied the rumours and warned unnamed parties against their “private and suspicious agendas,” emphasized Jordan’s commitment to and support of Palestinian rights, and denied bowing to external pressure.

Jordan’s economy continued to suffer the effects of the global financial crisis, with the budget deficit climbing to $534.2 million, compared with the $103.1 million budget surplus in the first eight months of 2008. Economic growth fell by half. In September Jordan signed grant agreements with the U.S. Agency for International Development (USAID), bringing U.S. economic assistance to Jordan for 2009 to $513.5 million. Jordan likewise received substantial economic assistance from the EU. Such grants from foreign donors testified to Western approval of “moderate” Jordan’s domestic and regional policies. Reportedly dissatisfied with the pace of economic reforms, King ʿAbdullah on November 23 dissolved the parliament midway through its term and called for new elections, and in December he replaced the country’s prime minister, Nader Dahabi, with a former palace aide, Samir al-Rifai.

In May Pope Benedict XVI visited Jordan in an effort to improve ties with the Muslim world; there he was boycotted by Islamists for refusing to apologize for previously quoting a text criticizing Islam. In August U.S. Internet giant Yahoo! announced that it had reached a deal to acquire the Jordanian Internet portal Maktoob, the world’s largest Arabic portal. In September Jordan announced plans to embark on an ambitious $2 billion project to build a canal that would replenish the dwindling Dead Sea with water from the Red Sea.

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Area: 434,128 sq km (167,618 sq mi) | Population (2009 est.): 30,747,000 (including about 2,000,000 Iraqi refugees, of which about 1,200,000 are in Syria and about 450,000 are in Jordan) | Capital: Baghdad | Head of state: President Jalal Talabani | Head of government: Prime Minister Nuri al-Maliki |